Aid, China on Bhutan menu

India will commit to helping Bhutan resurrect its tiny but sinking economy when its newly elected Prime Minister Tshering Tobgay visits New Delhi starting tomorrow, but will also seek assurances on China from the Himalayan nation.

Prime Minister Manmohan Singh’s commitment to his counterpart aims to calm the uneasiness that has crept into India’s relationship with Bhutan, a strategically crucial neighbour, over the past few months, top government officials here told The Telegraph.

New Delhi temporarily stopped fuel subsidies to its neighbour for the first time in 64 years in July, before restoring the subsidy after Tobgay won national elections on an openly pro-India campaign.

“We want to make sure that the fuel subsidy issue is history for Bhutan,” an official here said. “It’s time to move on and that’s what we want to communicate to the visiting Prime Minister.”

Though Bhutan’s economy — that plunged as sharply as some Himalayan cliffs after India withdrew subsidies — will be on the top of the agenda when Tobgay meets Singh and other Indian leaders, China, their mutual neighbour, will figure too. Finance minister P. Chidambaram, who will deliver India’s economic promises, and home minister Sushil Kumar Shinde, who will seek Bhutan’s cooperation along their border in China’s shadow, are meeting Tobgay one after the other, within an hour on Friday. Tobgay will meet Singh and external affairs minister Salman Khurshid on Saturday.

India’s economic aid package for Bhutan will include Rs 4,500 crore for Bhutan’s 11th Five Year Plan that will begin this year, Rs 500 crore as an economic stimulus to resuscitate its economy, and Rs 400 crore to meet its needs till the new plan is in place.

Bhutan had requested India — which finances over half of Bhutan’s public expenditure — for Rs 4,500 crore for the upcoming five year plan, but its officials sought additional funds for the stimulus when national security adviser Shivshankar Menon and foreign secretary Sujatha Singh visited Thimpu earlier this month.

By agreeing to each one of Bhutan’s economic requests at a time when its own economy is struggling, India wants to underline its commitment to its neighbour, the officials said.

It’s a commitment that Indian officials repeatedly assert has stood the test of time, since 1949 when the nations inked a friendship pact under which the hill nation allowed its bigger neighbour to “guide” its foreign policy.

From Telegraph India

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